Bold proposals by candidates to win votes and build electoral bases
It’s been an exciting field day in recent times for both the Republican and Democratic parties in the United States as candidates raise their game for the upcoming Nevada Caucus and the South Carolina primary.
The South Carolina primary will be held on Feb 20 for Republicans, and on Feb 27 for the Democrats.
The Nevada Caucus will be held on Feb 20 for the Democrats and Feb 23 for the Republicans.
The big Republican winner for the New Hampshire primary was Donald Trump with a 35.3% win, upsetting lead challenger Senator Ted Cruz of Texas who got 11.7% of the vote.
Cruz was the winner of the Iowa Caucus.
In the democratic party, Senator Bernie Sanders whipsawed established challenger Hillary Clinton with a 60.4% against her 38% for the New Hampshire primary. Clinton only barely eked out a minor win in the Iowa Caucus over Sanders.
What is common though across the rallies given by all the Presidential hopefuls are the bold moves proposed by the candidates in their hope of winning votes and building their electoral bases.
These are some of the radical things proposed so far:
Donald Trump said he would either renegotiate or axe the North American Free Trade Agreement, as he believes it caused US jobs to move to Mexico.
He also said he would impose a 45% tariff on imports from China, to compensate for the supposed economic advantage China gets over the US by devaluing its currency.
Bernie Sanders proposes universal health care and free college tuition, as well as a tax on financial transactions to help pay for it. He also said he would break up big banks to end “too big to fail.”
Ted Cruz wants to abolish a slew of federal agencies, including the Inland Revenue Service and the Departments of Education, Energy, Commerce and Housing and Urban Development.
In reality, can all these big policies really be enacted by the sweeping order of a single President?
No, simply because most policies require acts of Congress and the courts. Congress is the chief legislative body of the United States. Only Congress has the power to impose taxes, appropriate funds or declare war. Presidents cannot enact broad statutes without legislation.
The President can only issue executive orders and actions, but they are limited in scope.
He cannot abolish federal agencies or nationalise certain industries without approval by Congress.
So election fever aside, the reality is that it is going to be difficult for the President to implement any extreme policies.
Meanwhile, a recent article in Barrons mentioned that the ascendancy of non-establishment candidates could be one reason why stock markets are under pressure and could remain so for awhile.
The article says that the thinking goes that those who buy and sell stocks are comfortable with establishment candidates such as former secretary of state Hillary Clinton and former Florida Gov Jeb Bush, because both are fairly predictable.
If real estate developer and television star Donald Trump were to get elected, Washington could get an unpredictable president who carries through threats to China and its other trading partners with tariffs to level the playing fields. This could be harmful.
That is why Trump’s policy to try to deport millions of undocumented immigrants is a view that most Republicans view as highly impractical and likely to cause tremendous civil strife.
If Senator Sanders of Vermont was to win the White House, “the US would have a professed democratic socialist at the helm, with a long list of ambitious but expensive goals, such as single-payer national health care, free tuition at public colleges, and a major federal bridge- and highway-construction effort,” said Barrons.
The Wall Street Journal has written that his proposals, if enacted, would “amount to the largest peacetime expansion of government in modern American history.”
The Standard & Poor’s 500 stock index has declined as Trump and Sanders have gained in popularity, based on polling data compiled by RealClearPolitics, which averages the results of multiple national polls.
The article said that the rise of these unorthodox candidates is troubling to both Wall Street and Washington because financial markets, which have more than enough to worry about — now have to deal with the likelihood of political instability for months to come.
While traditional market based concerns will always have a bigger role than presidential politics in moving stocks, the market may have some concerns now, with so many anti-establishment candidates performing so well.
“There is a realisation among global investors that all big decisions are global, and there is some apprehension about an oddball candidate as president on the global stage.
Our bargaining power as a nation could be diminished.” said Jim Paulsen, the chief investment strategist with Wells Capital in the article.
While it is true that the President will have some sway on the sort of policies to be adopted by the US, ultimately it is the fundamentals of the bigger economy that impacts markets. No one single person, especially one with limited powers can severely affect the direction of markets.
Bold proposals by candidates to win votes and build electoral bases
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